A Free Trade Agreement (FTAs) is an international agreement between countries aimed at promoting trade by reducing or eliminating barriers such as tariffs and quotas. They facilitate the exchange of goods, services, and investments by creating a more open and predictable trading environment. In general, FTAs remove barriers and promote free trade between countries, allowing participants to abide by agreed-upon laws and be treated as citizens of foreign countries when conducting business transactions.
The Benefits of Free Trade Agreements:
Facilitates imports and exports between countries
Stimulates inward flows of investment
Explores key manufacturing and service sectors
Creates global partnerships
Encourages the exchange of expertise to create jobs and stimulate growth
Bahrain profits from multiple FTAs. Each has unique relationships and benefits, but they have all contributed to the expansion of multiple sectors and increased the economy of Bahrain . The Kingdom has seen a significant increase in import and export figures as it has built more FTA relationships, noticeably in the 32.60% increase in imports between 2013 and 2019.
The Greater Arab Free Trade Area (GAFTA) is a pan-Arab free trade zone promoting economic integration and trading in the Arab world. It removes trade barriers and increases intra-regional transactions while promoting competition within domestic markets. Bahrain exports to the GAFTA totaled over USD 6.4 billion in 2021 and imports totaled USD 2.5 billion.
The Economic Agreement between the GCC states was adopted by the GCC Supreme Council in December 2001. It grants national treatment to all GCC firms and citizens in any other GCC country. Doing so removes all barriers to cross country investment and trade. In 2021, there were over USD 5 billion in exports from Bahrain to GCC, and USD 2.3 billion in imports from this agreement alone.
The GCC-Singapore Federal Trade Agreement (GSFTA) allows GCC goods duty-free access to the Singaporean market. It includes trade in goods, customs procedures, rules of origin, as well as trade in services and government procurement. In 2021, Bahrain exports to Singapore totaled over USD 154 million and imports totaled USD 51 million.
The FTA between the GCC and the EFTA states was signed into law in June 2009 and includes 93 articles and 16 annexes covering trade in goods, trade in services, competition, and more. This is a great example of a free trade agreement.
In the agreement, industrial goods, including fish and other marine products, benefit from duty-free access to EFTA States, while most products imported into the GCC have custom duties eliminated. In 2021, imports from this agreement to Bahrain totaled USD 303 million while exports totaled USD 16 million. In addition, bilateral arrangements on agricultural products between three individual EFTA States and the GCC have been established.
